How do I know if I am exempt from overtime pay?

Brad Nakase, Attorney


Email Brad


Wages is defined as payment in exchange for labor.[1] Labor is defined to include, “labor, work, or service whether rendered or performed under contract … or other agreement if the labor to be paid for is performed personally by the person demanding payment.”[1] Basically, labor includes any work performed for the benefit of an employer. A 40-hour work week is considered full-time making eight hours a day a normal work day.[2]  Anytime worked after these eight hours is considered overtime.[3] However, overtime is not allotted to all employees.


Exempt v. non-exempt employees


In order to determine whether an employee is entitled to overtime, it must first be decided what category the employee falls into: exempt or non-exempt. Non-exempt employees usually receive more benefits than that of an exempt employee including overtime.

In California, it is usually agreed employees have the right to (1) overtime when working over 40 hours[4]; (2) right to be paid minimum wage (currently not less than $10)[5]; and (3) right to certain breaks including lunch/dinner.[6] However, this usually applies to non-exempt employees. There are certain times when an employee is not entitled to these benefits and will be labeled as exempt employees.[7]

In order to be exempt, the employee must meet certain requirements.[8] These include:

  • Making at least twice California’s minimum wage
  • Duty to use his or her own judgment in the workforce
  • Employee works in administrative or executive decision making[9]



Minimum wage requirements for employees


Minimum wage has changed over the years. After July 1, 2014, the minimum wage in California was set to at least $9/hour.[10] However, after January 1, 2016, the minimum wage was changed to not less than $10/hour.[11] However, this also depends on how many employees the employers has working for them at one time. If the employer has 26 or more employers, the minimum wage increases each year, starting at ten dollars and fifty cents in 2017, eleven in 2018, and twelve in 2019.[12] If an employer has 25 employees or less, the minimum wage increases each year starting at ten dollars and fifty cents in 2018, eleven dollars in 2019, and twelve dollars in 2020.[13]

In order for an employee to be exempt from minimum wage, he or she must be making twice the California’s minimum wage. For example, if your employer has 30 employees and the year is 2019, you must be making at least $24/hour to be qualified as an exempt employee. If you are making less, you will be considered a non-exempt employee.


Making his or her own judgment


If the minimum wage requirement is met, the next factor to analyze is whether the employee makes his own judgment while working; specially, does this employee assert his or her control or does the employer inherently have the control? Control arises when an employee can usually set his or her own time, use his or her own equipment, and finish the task at hand as he or she sees fit.

If all these requirements are met, the employer can treat his or her employee as exempt and the employee, unfortunately, cannot benefit from overtime or breaks. Although the employer may be paying the employee double minimum wage, the employer has an arguable more productive staff because breaks are not entitled and an employee cannot ask for overtime.


Examples of overtime exemption positions


Certain jobs have their own rules and regulations. For instance, physicians who pick up extra shifts or are on call can gain overtime; workers who have commission-based payments; tutors; care-takers; and union employees.


Union employees:
union employees may be exempt from overtime benefits depending on the agreement. If the agreement provides:

  • For wages, hours of work, and working conditions;
  • Premium wage rates for overtime hours worked; and
  • Hourly rate of at least 30% more than minimum wage.[14]


Outside sales person:
these people are considered exempt under California law as long as he or she is:

  • At least 18
  • Spends more than half his or her time working outside the employer’s office and
  • Sells services, items, or facilities[15]


An example of a sales person would be a door-to-door salesman like one who sells vacuums or knives.


Professional exemption:
this exemption embodies a few professions including most teachers (private school or tutors as well) and physicians. First, physicians can be exempt if:

  • Paid $55.00/hour
  • Perform duties that require a license (like surgery)[16]


Teachers, on the other hand, are usually exempt given their governmental position but a private teacher can also fall under this category if:

  • Teaches at a private elementary or secondary institution where students are in kindergarten to 12th[17]


Commissioned exemption:
those employees who receive commission can also be categorized as exempt if:

  • Earnings are more than on and half times minimum wage or
  • Commission is more than half of totally payment.[18]



Although this above list is not exhaustive, it is important to understand where you fall as an employee because benefits do differ. If you feel you have been qualified under the wrong category: exempt or non-exempt, you may speak with your human resource department or employer. It is best to handle issues internally so the result may be quicker and future issues put aside. However, if this does not work or is not an option, speaking with an attorney can lead you to some relief.

Call or Write for a Free Confidential Consultation

If you or someone you love need an aggressive and compassionate attorney who will listen and aggressively protect your interest, we invite you to call attorney Brad for a free consultation.

I’d like to hear your story. What happened?

$0 Upfront

There is no money upfront to hire me.

$0 Unless We Win

No Fee – Unless We Win

$13,000,000.00+ Won for Clients

I’ve won $13 million dollars for my clients.

98% Success Rate

I’ve won 98% of my clients’ cases.

Insurance Insider

I’ve worked at a major national law firm serving big name insurance companies by defending insurance companies and their insureds who were sued for millions of dollars.

I Care

My success is measured in the real differences made to my clients’ quality of life. I focus on achieving the most exceptional and fairest compensation for my clients.

TYPES OF PERSONAL INJURY CASES I HANDLE

Car Accident Lawyer

I have served hundreds of injured persons. Also, I have worked at a national law firm hired by big-name insurance companies to defend big businesses against high stakes lawsuits stemming from car accidents. I know all the tricks the insurance companies use to minimize money payment to injured persons.  Learn More

Motorcycle Accident Lawyer

I own and ride a Honda CBR500. I understand the unique challenges of being a rider in an ocean of cars. A motorcycle accident can occur anywhere and at an instant which may result in life-changing injuries. As a rider, I have a unique insight to protect your interest and ensure you are fairly compensated for your injuries.

Trucking Accident Lawyer and Commercial Vehicle Accident Lawyer

I’ve helped major insurance companies defending truckers in severe injury cases which include traumatic brain injuries. I have a unique insight into how big insurance companies defend trucking accidents. I will fight hard to ensure you are fairly compensated for your injuries.

Uber Accidents Lawyer

I have worked at a major national law firm hired by the insurance company to defend Uber drivers. I’ve defended Uber drivers in severe injuries cases and know how insurance companies defend injury cases.

Taxi Accident Lawyer

I have worked at a major national law firm hired by the insurance company to defend taxi drivers; I’ve defended taxi drivers sued in serious injuries cases and know how insurance companies defend injury cases.

Trip and Fall Injury Lawyer

Trip and fall cases are challenging because of the complexity of the issues involved. To establish liability, trip and fall cases may require safety engineers, structural engineers, or any other experts qualified to testify regarding the standard of care in the specific situation and whether it was breached.

Legal Reference

Federal Register Journal of US: ‘Defining and Delimiting Exemptions

[1] Cal Labor Code § 200

[2] Cal Labor Code § 510

[3] Cal Labor Code § 510 (a)

[4] Labor Code § 510(a)

[5] Labor Code § 1182.12(a)

[6] Labor Code § 512(a)

[7] Labor Code § 515(a)

[8] Labor Code § 515

[9] Labor Code § 515(a)

[10] Cal Labor Code § 1182.12(a)

[11] Cal Labor Code § 1182.12(a)

[12] Cal Labor Code § 1182.12(b)(1)(A); Cal Labor Code § 1182.12(b)(1)(B); Cal Labor Code § 1182.12(b)(1)(C)

[13] Cal Labor Code § 1182.12(b)(2)(A); Cal Labor Code § 1182.12(b)(2)(B); Cal Labor Code § 1182.12(b)(2)(C)

[14] Labor Code § 512

[15] Cal. Code of Regs., tit. 8, §§ 11010–11170

[16]Labor Code § 515.6

[17] Labor Code § 515.8(a)

[18] 29 CFR § 778.117

© Copyright | Nakase Law Firm (2019)